§ 37.3. Prohibited practices.
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/us/cfr/t12/s§ 37.3·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Anti-tying. A national bank may not extend credit nor alter the terms or conditions of an extension of credit conditioned upon the customer entering into a debt cancellation contract or debt suspension agreement with the bank.
(b)Misrepresentations generally. A national bank may not engage in any practice or use any advertisement that could mislead or otherwise cause a reasonable person to reach an erroneous belief with respect to information that must be disclosed under this part.
(c)Prohibited contract terms. A national bank may not offer debt cancellation contracts or debt suspension agreements that contain terms:
(1)Giving the bank the right unilaterally to modify the contract unless:
(i)The modification is favorable to the customer and is made without additional charge to the customer; or
(ii)The customer is notified of any proposed change and is provided a reasonable opportunity to cancel the contract without penalty before the change goes into effect; or
(2)Requiring a lump sum, single payment for the contract payable at the outset of the contract, where the debt subject to the contract is a residential mortgage loan.
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§ 37.3
Prohibited practices.
Fed. Reg.×7
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